ECB’s Draghi Doesn’t Back Up Talk With Action, Markets Slide

Markets spun into reverse after it became clear that ECB President Mario Draghi — today, at least — wasn’t going to back up last week’s bold talk.

The ECB didn’t announce any new programs today, nor did it re-open any moribund programs. It left interest rates unchanged as well. After a rally last week predicated solely on jawboning and speculation, a splash of cold water is hitting the markets.

The euro was at $1.24 before the press conference; it’s around $1.2200 now. European stocks have slid into the red, and U.S. stocks are following them there. The Dow is down 100, the S&P 500’s down 11.

The yield on the U.S. 10-year Treasury is down to 1.48%; the yield on Spain’s 10-year is 6.90%.

The bottom line is that for all the talk, nothing is happening right now. The market’s don’t like that. Here’s a smattering of responses from the investor community:

Carl Weinberg, chief economist, High Frequency Economics: Once again, we have no commitment to action from the ECB, and no execution of promises previously made. Nothing seems set to happen now. Traders and investors who expected immediate action are, and should be, disappointed. President Draghi told governments that they have to live up to their commitments. That sentence was linked to a statement about how the governments must stand ready to activate EFSF. More scolding of governments, but no ECB action, is the bottom line.